Anti-nuclear group: Comanche Peak expansion could cost $27.6 billion
April 29,2009
By JACK Z. SMITH
Fort Worth Star-Telegram
The price tag for adding two new generating units at the Comanche Peak nuclear power plant near Glen Rose could be a staggering $23.8 billion to $27.6 billion, according to the author of a report that raises concerns about the cost of new nuclear facilities and a potential escalation in electric rates.
Clarence Johnson, a former state utility regulatory official, prepared the report for the Texas office of Public Citizen, an organization that opposes new nuclear plants.
The report instead favors energy conservation and efficiency, along with accelerated development of renewable energy alternatives such as wind and solar power, calling them more environmentally friendly and cheaper in the long run.
Luminant, the Dallas-based power generator that operates Comanche Peak, 45 miles southwest of Fort Worth, estimates that it could cost $15 billion to build two 1,700-megawatt units there and that a license might be secured by December 2012. Construction of the additional 3,400 megawatts of capacity could take about four years, the company said.
In a statement Wednesday, Luminant said it is "taking prudent steps in considering this project," including "carefully evaluating cost, capital and market conditions throughout the process."
Luminant plans to partner with Mitsubishi Heavy Industries, designer of the proposed reactors.
In his report, Johnson said a "reasonable estimate" of the cost of adding nuclear capacity in Texas would be $7,000 to $8,130 per kilowatt.
Based on that, Luminant's proposed addition of 3,400 megawatts of generating capacity at Comanche Peak would cost $23.8 billion to $27.6 billion, Johnson said in a telephone conversation with the Star-Telegram.
A megawatt is 1,000 kilowatts.
Johnson's report raises the specter of enormous costs not only for expanding Comanche Peak, but also for constructing two additional units that NRG Energy, a New Jersey-based utility, proposes at the South Texas Project near Bay City on the Gulf Coast.
The report made only brief mention of plans by Chicago-based Exelon to build two nuclear units near Victoria in South Texas.
Johnson, in his report, warned that Luminant, already the dominant power generator in North Texas, would have even more power to influence wholesale electricity prices if it expands Comanche Peak. Higher wholesale power prices could result in higher retail electricity prices for homeowners and businesses.
Proponents of added nuclear power in Texas say it would help diversify the state's power-generation mix and reduce its heavy reliance on natural-gas-fired generation, which is more expensive than coal-fired plants.
Natural gas and coal fueled 80 percent of Texas' power generation in 2008, with nuclear providing about 10 percent.
Nuclear proponents note that the plants are largely emissions-free.
Coal plants in particular have been criticized by environmental groups for emitting huge amounts of carbon dioxide, the primary "greenhouse gas" that many scientists say contributes to global warming.
Robert Black, a spokesman for Nuclear Energy for Texans, which he said is funded mainly by Luminant and Exelon, took issue with the Public Citizen report.
Black, a former aide to Gov. Rick Perry, questioned why Texans should care about how much new nuclear units cost, since their builders have to absorb the expense in the state's deregulated electricity market.
But Johnson, in his report, cited various federal subsidies available to builders of new nuclear plants, including loan guarantees, production tax credits, investment tax credits and insurance.
"As the owners of nuclear construction projects experience cost overruns and realize that the projects will produce large financial losses, the firms may become desperate to appeal for greater public subsidies," the report said.
"Loan guarantees probably impose the greatest risk on taxpayers."
Johnson said costs for previously constructed nuclear plants far exceeded initial estimates.
The current two-unit Comanche Peak plant, completed in 1993, cost at least $12.18 billion, Johnson said, citing Federal Energy Regulatory Commission records as his source. It is the most-expensive nuclear plant ever built in the U.S., he said.
The $12.18 billion amount is more than 15 times the original cost estimate of slightly less than $800 million for Comanche Peak. The Star-Telegram has previously estimated the final plant cost at about $11 billion.
Nuclear power proponents stress that the cost of Comanche Peak and other existing plants was hit by unusually high inflation and changing federal regulations that delayed projects after an incident at the Three Mile Island plant in Pennsylvania in 1979.
They note that plant designs have improved, and the licensing process has been streamlined.
JACK Z. SMITH, 817-390-7724
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